Southern standard. (McMinnville, Tenn.) 1879-current, 1887-03-05
The Usury Bill.
Cor. America

The appeal signed "Toiling Mill
ions" for the passage of the Senate
Usury bill assumes that such a law
would compel loans to agricultural
people" at per cent. The "honest
farmer" is not now a desirable eusto-
mer at 10 per cent. He is too slow
and unpunctual. He cannot borrow
at the real interest rate of the COM
munity. All that is paid for the use
of money is not properly "interest."
Where there is any risk, it requires a
higher rate to tempt the lender to part
with his cash. Interest proper is re-
gulated mainly by the profits of bust
ness. A business man who can make
20 per cent. will give or 10 per cent.
The writer of the foregoing appeal
says that business is done in Tennessee
on 10 or 20 per cent. basis. That is
certainly fierce exaggeration. What
money-owner will lend for to
punctual man, when made perfectly
secure, represents about the real value
of the use of money in given COM
munity. What is paid by a borrower
in excess of this really represents in
surance. Supply and demand govern
the rates of loans equally with the
prices of commodities, rents or wages.
The Legislature has no more right to
forbid the money-owner from hiring
out his money for all he can get than
to forbid the "honest farmer" from
hiring his farm for all he can get, or
the HORSEPOWER his house, or the
workman his labor. Nor does the
borrower needed to be treated like an
infant-taken into guardianship by
the Legislature-protected against his
own folly by being disqualified from
giving what he ciphers out money
will be worth to him. All this sort
of thing is essentially undemocratic.
1t contains the very spirit of paternal
government-that the people need to
be protected by government against
their own folly-are incapable of self
government. All usury laws should
be repealed. That is the true policy.
The risks they inflict make loans
more difficult and oppressive. Usury
laws are survival of barbarism.
Formerly "usury" meant any in
terest. In that sense the word is used
in the Bible-a charge for the use of
money. All interest was condemned.
That was seen to be absurd. Fixing
legal rate as the limit of what one
may charge for the use of his money
is as absurd and unjust as fixing a
legal standard of rents or profits or
wages. The most advanced COM
munities have abolished usury laws.
Really they make the actual rates OF
loans higher by the risk they create
The lender exacts the real interest
and also something as insurance
against the penalty of usury.
If you etfectually forbid the loan
ing of money in Tennessee at more
than per cent. you do not enable the
"honest farmer" to borrow at that
You prevent him from borrowing a.
all. You force the man of moderate
means in the shape of money, out O
Tennessee. AT least you drive hi
money out. He can easily get from
toto II per cent. in Georgia, Alabama
Mississippi, Arkansas, Kansas, etc.
only a few hours away from home
He would perhaps, rather sit lazily
at home and take less, but this Senate
usury bill, if passed, would stimulate
him into enterprise, and the ice onc'
broken, he would wonder at his pre-
vious sluggishness. You cannot op
press money. Like quicksilver,
you bear down upon it, it slips ava.
elsewhere. Ubi libetas ibi patria, i
its motto, as it was DR.. Frankliu's
This Senate usury bill ought to hav
been christened, ga Bill to Checl
Enterprise and to Drive Money iron
the State" The rapidly developin
enterprises in our midst now need tn
money. Those in our adjacent siste
States will employ it, if it is driver
away from home. The "hones
farmer" cannot be benefited by or
pressing the money owner. Whe
will our solons learn the merest rud
ments of political economy?
COMMON SENSE.
The Race Problem,